The Palm Scribe

ISPO needs to be involved in boosting productivity of palm oil smallholders

BUNGARAN SARAGIH, expert and former agriculture minister. (Photo: Wicaksono/The Palm Scribe)

Noted agriculture expert Bungaran Saragih is saying that it was imperative for the Indonesian Sustainable Palm Oil (ISPO) scheme to be involved in the country’s ongoing drive to boost the productivity of palm oil plantations of smallholders.

ISPO standards are now obligatory for Indonesian palm oil producers as part of the country’s commitment o move towards a sustainable production of the commodity that is now a major contributor to the improvement of people’s welfare and in power eradication. Agriculture Ministry officials have said that Palm oil contributed Rp 260 trillion in revenues in 2017 and affected directly or indirectly to some 110 million people.

Saragih, a former agriculture minister who is the Chairman of the Board of Patrons of the Palm Oil Agribusiness Strategic Policy Institute (PASPI), because of the obligatory nature of ISPO, requirements could be included in it, so that in order for palm oil companies to receive its sustainability certification they must first show they were helping independent palm oil farmers also known as smallholders, to organized themselves and be able to become their equal partner.

An equal partnership where the farmers no longer come a burden to the large companies, was a prerequisite to higher productivity, higher prosperity and a better safeguarded environment, he said.

“In my opinion, the fastest way, is by including into ISPO, since ISPO is now mandatory, a criteria so that a large plantation could only get certified if they assisted the farmers’ organizations which supply them with the fresh fruit bunch,” Saragih said during a recent interview with The Palm Scribe held on the margin of a palm oil conferenced in Bali.

“I am saying that one of the requirements in ISPO should be that companies must provide guidance to farmers, and this guidance process must be mutually beneficial,” Saragih added.

By mutually beneficial guidance, he meant one that would lead to the farmers no longer become a burden to the companies.

Saragih added that in the criteria to be included in ISPO, the government must demand from the big companies that the productivity of the plantation of the farmers or the farmer’s organization, should be equal to that of their own plantation. Being on par with the farmers would be conducive to a transfer of technology  and a better and closer, more harmonious cooperation between them.

He also said that such arrangement was not only beneficial to the farmers but also to the companies and the palm oil sector in general.

“If there is good, harmonious relations between large plantations and small plantations, then, world sympathy for the large company will improve too,” he said. Saragih said that the current view on large plantation companies, including the views of international NGOs, is that these large companies do not think about others and only think about profit. They do no think about the communities around their plantation and only take advantage from them.

“The large plantations have to be able to show that it is to their interest to help,” the small farmers, he said. The large plantation should help the farmers to organize themselves into strong, orderly and functional organizations and thus achieve a power balance and a more balanced bargaining position among them.

Saragih, who is also commissioners in a number of leading agro companies, including in palm oil, said that by having an organizations, it would have much easier for farmers to receive services, such as in the form of information, agricultural inputs, financing and also in efforts to improve their market.

“An orderly, strong farmers’s organizations has become a requirements for improving their revenue and welfare,” he said.

He said that what the large plantations and also especially the  government also needed to recognize is that smallholders are actually a power in their own.

“One of the more important things I want to say is that in reality, smallholders have extraordinary economic power. With or without government help, ever since the (1998) crisis took place, they have been planting on their own, seek  their own market,” he pointed out, adding that he believed that the farmers themselves were not asking for financial aid. and expressed his concern that  financial assistance could even kill the existing dynamism.

Saragih pointed out that even without government assistance, small independent farmers have been able to add another three million hectares of palm oil plantation since 2000. Therefore, he said he believed the government should not interfere too much and should limit its role to producing regulations, facilitating farmers, provide things that  companies could not provide and most importantly, help the large plantations and the smallholders in working together  well.

The former minister also said that palm oil figured prominently in the history of the country’s agriculture, He said that since Indonesia became independent, two revolutions had taken place in the agriculture sector.

The first one, he said, was the Green Revolution which resulted in the country achieving food resilience and and also self-sufficiency. Unfortunately, he added, the result of this Green Revolution did not help in improving the welfare of the farmers,.

The second, he said, was the Palm Oil Revolution in which production was not only enough to cover consumption but also to turn Indonesia into the world’s largest exporter of the commodity and more importantly it raised the welfare of farmers.

“It was palm oil, among the other agriculture (commodities) that has helped our farmers raise themselves into the middle class,“ he said.

When large companies and small farmers can work together as equal partners, productivity will rise, welfare will rise and the environment would benefit. “That is sustainable development and we have to link ISPO to increasing productivity, increasing welfare and cooperations, the partnership between the farmers and the companies under the guidance of the government.”

“So in my opinion, there must now be a change in ways of thinking a change in what’s of acting between the large companies and the small companies so that they can survive at the national level.”

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